Spending down on Christmas gifts

The FINANCIAL -- Retailers are fighting a losing battle to persuade shoppers to splash more cash at Christmas, new research shows.

Data from the Aston Centre for Retail Insights (ACRI) suggests that consumer spending is continuing to be squeezed, and that seasonal advertising is failing to engage adequately with the public.

The ACRI’s Christmas Shopping Survey 2017 shows consumers plan to spend an average of £408 each on Christmas presents – down from £429 in 2016 and £441 in 2015. That figure is all the more worrying for retailers against a backdrop of rising inflation.

ACRI researchers, based at Birmingham’s Aston University, also found 6 per cent of those surveyed planned to avoid Christmas shopping completely.

Heiner Evanschitzky, Professor and Chair of Marketing at Aston Business School, said: “The challenges facing traditional retailers have been well documented but what is particularly worrying for them is not just that spending on presents continues to drop – it’s also that their messages simply aren’t engaging with consumers.

“Put simply, shoppers do not feel very inspired by Christmas offers. Those big-budget advertising campaigns are no longer enough – the average consumer now judges them to be only ‘somewhat emotional’ and it’s likely that shoppers are suffering from ‘festive fatigue’ where ad campaigns are concerned.”

The Aston team also looked at the impact of customer “inspiration” – how engaged consumers are by the shopping experience and advertising around that experience. Aston research has shown that more inspired customers will buy more from a retailer.

Aston’s Professor Markus Blut said: “Furniture retailing is the area most sensitive to inspiration levels – and that’s good news for IKEA, who score highest in this sector.

“John Lewis score highest for their homeware and electronics departments but their furniture offering is comparatively weak – having Moz the Monster under the bed may not encourage furniture sales. In the health and beauty sector, The Body Shop is seen as the most inspirational retailer.”

Professor Christof Backhaus, who was also involved with the research, said: “More research would be needed to draw up a definitive ‘inspirational retailer ranking’ but these findings certainly show key differences in how the shopping experience is perceived in different outlets.”

When it comes to where people are shopping, high street operators appear to have adapted to the rise of online shopping, although speciality stores have been hit hard by online competition.

Some 80 per cent of those surveyed for the ACRI intend to buy at least some of their Christmas presents online, and 15 per cent shop with their mobile phone for gifts.

Local high street outlets are used by 50 per cent of shoppers, major supermarkets by 47 per cent, department stores by 42 per cent and shopping centres by 40 per cent. Those figures represent a stable share compared with last year but the outlook for speciality stores is less encouraging, with only 22 per cent of shoppers intending to use them.

And what do we want to receive as presents? The most popular gifts are also the most “sensible”.

Prof Evanschitzky said: “The most desired Christmas presents this year are clothing and shoes, which are the choice of 28 per cent of the people we surveyed.

“Almost a quarter of people – 24 per cent – would rather choose their own present, saying they’d like to receive gift vouchers. And 19 per cent would just like to get away from it all, hoping to receive a holiday of some sort as a present.”